Assume Gages has the following budgeted sales for the quarter: (Click the icon t

Question

Assume Gages has the following budgeted sales for the quarter: (Click the icon to view the sales data.) Determine Gage's budget for March cash collections assuming credit sales are collected as follows 90% s collected the month after sale, 8% is collected two months after the month of sale, and 2% s never collected Complete the cash budget to determine how much cash will be collected in March Budgeted sales Gage's Cash Collections Budget For the Month of March Cash sales in current month JanuaryFebruary March COD sales S 12,000 S 16,000 S 17000 00,000 135,000 105,000 $ 112,000 S 151,000 S 122,000 Collections on credit sales: 90% of credit sales made last month 8% of credit sales made two months ago Total sales Total cash collections Print Done

Explanation / Answer

Gage's Cash collection Budget For the Month of March Cash sales in current month $    17,000 Collection on credit sales: 90% of credit sales made last month ($135,000*90%) $ 121,500 8% of credit sales made two months ago ($100,000*8%) $      8,000 Total cash collection $ 146,500

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